Caterpillar Inc. (NYSE: CAT)’s stock price has gone decline by -1.29 in comparison to its previous close of 363.91, however, the company has experienced a -3.41% decrease in its stock price over the last five trading days. Seeking Alpha reported 2024-04-16 that Caterpillar’s earnings growth is projected to be uninspiring, with a compound annual growth rate of 3.3% between FY 2024 and FY 2026. I see good reasons for such uninspiring projections, due to concerns about geopolitical conflicts and China’s softened demand. Yet, CAT stock is trading at a high valuation, with P/E and P/cash ratios far above historical averages.
Is It Worth Investing in Caterpillar Inc. (NYSE: CAT) Right Now?
The price-to-earnings ratio for Caterpillar Inc. (NYSE: CAT) is above average at 17.83x. The 36-month beta value for CAT is also noteworthy at 1.16. There are mixed opinions on the stock, with 7 analysts rating it as a “buy,” 4 rating it as “overweight,” 11 rating it as “hold,” and 2 rating it as “sell.”
The public float for CAT is 498.38M, and at present, short sellers hold a 2.62% of that float. The average trading volume of CAT on April 16, 2024 was 2.44M shares.
CAT’s Market Performance
CAT stock saw an increase of -3.41% in the past week, with a monthly gain of 3.53% and a quarterly increase of 25.06%. The volatility ratio for the week is 2.68%, and the volatility levels for the last 30 days are 2.11% for Caterpillar Inc. (CAT). The simple moving average for the past 20 days is -1.59% for CAT’s stock, with a 24.96% simple moving average for the past 200 days.
Analysts’ Opinion of CAT
Many brokerage firms have already submitted their reports for CAT stocks, with Truist repeating the rating for CAT by listing it as a “Buy.” The predicted price for CAT in the upcoming period, according to Truist is $390 based on the research report published on March 14, 2024 of the current year 2024.
Evercore ISI, on the other hand, stated in their research note that they expect to see CAT reach a price target of $338, previously predicting the price at $321. The rating they have provided for CAT stocks is “In-line” according to the report published on February 20th, 2024.
TD Cowen gave a rating of “Outperform” to CAT, setting the target price at $338 in the report published on February 06th of the current year.
CAT Trading at 4.80% from the 50-Day Moving Average
After a stumble in the market that brought CAT to its low price for the period of the last 52 weeks, the company was unable to rebound, for now settling with -5.97% of loss for the given period.
Volatility was left at 2.11%, however, over the last 30 days, the volatility rate increased by 2.68%, as shares surge +1.89% for the moving average over the last 20 days. Over the last 50 days, in opposition, the stock is trading +13.79% upper at present.
During the last 5 trading sessions, CAT fell by -3.59%, which changed the moving average for the period of 200-days by +46.80% in comparison to the 20-day moving average, which settled at $365.37. In addition, Caterpillar Inc. saw 21.49% in overturn over a single year, with a tendency to cut further gains.
Insider Trading
Reports are indicating that there were more than several insider trading activities at CAT starting from Fassino Anthony D., who sale 4,575 shares at the price of $329.80 back on Feb 28 ’24. After this action, Fassino Anthony D. now owns 23,474 shares of Caterpillar Inc., valued at $1,508,835 using the latest closing price.
MacLennan David, the Director of Caterpillar Inc., purchase 350 shares at $323.37 during a trade that took place back on Feb 23 ’24, which means that MacLennan David is holding 5,238 shares at $113,180 based on the most recent closing price.
Stock Fundamentals for CAT
Current profitability levels for the company are sitting at:
- 0.19 for the present operating margin
- 0.35 for the gross margin
The net margin for Caterpillar Inc. stands at 0.15. The total capital return value is set at 0.25. Equity return is now at value 58.45, with 12.20 for asset returns.
Based on Caterpillar Inc. (CAT), the company’s capital structure generated 0.66 points at debt to capital in total, while cash flow to debt ratio is standing at 0.34. The debt to equity ratio resting at 1.95. The interest coverage ratio of the stock is 25.37.
Currently, EBITDA for the company is 15.97 billion with net debt to EBITDA at 2.04. When we switch over and look at the enterprise to sales, we see a ratio of 3.15. The receivables turnover for the company is 3.52for trailing twelve months and the total asset turnover is 0.77. The liquidity ratio also appears to be rather interesting for investors as it stands at 1.35.
Conclusion
In summary, Caterpillar Inc. (CAT) has had a better performance as of late. Analysts have bullish opinions on the stock, with some viewing it as a “buy” and others as a “hold”. It is worth mentioning that the stock is currently trading in close proximity to its 50-day moving average and its 52-week high.
